A lot of developers, especially those that stay with the same company for many years and especially those working for large corporations with very healthy HR presence probably end up in this situation at one time or another. As the time progresses, you learn more, acquire new skills and end up with many more responsibilities, maybe even start leading development teams, and you start asking your self, how come I'm holding the same title and receiving the same pay (adjusted for inflation) that I was getting when I got hired?

You ask your supervisor how much more you'd need to do to get promoted to next title level and your supervisor agrees that the time is long past. But after you are promoted, your pay increased is still "HR-capped" and you realize that you are making good 10-15k below what you think the market value is for your skills.

You have two cards you can still play: 1) Look for a new job. Interview in a bunch of places and then either leave your current company, or see if they can match the pay (personally, if a company requires you to find a different job before they give you your fair value, I wouldn't stay with that company at that point) or 2) tell your current employer that your resume is posted and you are actively looking for offers. You may be happy with management, your work, people you work with, but 10k difference in salary is important and the only way to get your true market value is to put yourself on the market. So this is their chance to match your salary before you find something and leave.

What are the likely repercussions of playing card #2? Is it ever advisable to openly tell your current company that you are looking to leave your current position?

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2

Its best not to raise any alarms/flags until you have a solid offer at hand. you do understand the concept of notice period right?
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Aditya PApr 25 '11 at 5:56

3

Lots of people in lots of fields will be in similar positions. Unless you can show why it's in some way programmer-specific, it's off-topic here.
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David ThornleyApr 25 '11 at 15:07

maybe other people in some fields are in similar positions but every industry has unique dynamics. Some professions require employers by law to pay you certain salary given your education level. Most other professions won't hire people who don't have an actual degree in that field, in computers that happens all the time. Programming field is much faster moving than most others. Programmers are treated very different across different organizations. For these reasons I wanted advice specifically from other developers. Thank you all, who responded (and didn't vote to close)
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DXMApr 25 '11 at 23:38

11 Answers
11

Therefore you want to follow option #1. If you actually are happy with your job, after you get another offer go back to your current employer and tell them point blank, "I want to stay here, but I have an offer elsewhere for $X. Financially that would be a big deal for me, but I would prefer to stay here. What can you do to help me out?"

Be very, very aware that if you do this, you need to pay attention to the vibe you get at your job. You're trying to minimize it, but there is a risk that they will decide that you are a flight risk. If they decide that then they may give you a raise..and immediately turn around and try to find your replacement. After which you'll get fired.

Incidentally this is why, after you tell them you will leave, you should never, ever accept a counter-offer. It almost never works out. Everything that you were unhappy about will still be there. And they now know that you are unhappy and will be trying to figure out when they can fire you on their schedule, not yours.

I would say that this really depends on the environment you work in. If they are reasonable folks they will realize how hard it is to hire someone new and get them up to speed. Assuming that you are actually valuable, that is.
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Zan LynxApr 25 '11 at 16:18

1

@zan-lynx: If they are competent, then their awareness of how hard you are to replace only increases the urgency of doing so once they realize that they need to do so. I've seen a number of counter-offers accepted, and heard the outcome of a number more. I am not aware of any that worked out for a significant period of time.
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btillyApr 25 '11 at 16:41

@btilly: And yet, replacing you is a foolish idea. They have no guarantees about your replacement either. He or she may leave even sooner than you would, plus the overhead of all that lost time due to training.
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Zan LynxMay 11 '11 at 16:49

@zan-lynx: Both trying to replace you and not trying to replace are expensive, and it is not clear which is more expensive. However businesses usually err on the side of replacing uncontrollable risks with risks that they have some control over. If they know that you're unhappy and are seeking to leave, you're a significant uncontrollable risk...
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btillyMay 11 '11 at 16:54

@btilly: No you aren't. You're a known factor. You wanted to leave because of factor X. They negotiated and provide X. Now you are satisfied. A new developer is even more unknown than you are! By your theory the business would be insane to replace you.
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Zan LynxMay 11 '11 at 23:01

Don't do this man. What is that you are expecting your employer to do here? Be afraid of your departure and believe that you are actually planning to leave your comfort zone? Does not work like that.

You will actually have to get an offer before they sit on the negotiating table.

If you let your colleagues and their grandma know that you are looking, it only adds pressure to you now that you are a senior guy, need a job that fits your credentials and is upwardly mobile and all of it within a stipulated period of time.

Unless you are trying to test if your bp too can cross 200/120 for real, don't do this.

In my experience, there is no good reason to ever make it public to your current employer that you are looking, unless you actually have an offer that can be countered.

That being said, I strongly believe that one should ALWAYS be active on the job market, whether it entails going on actual interviews or simply scanning lists of opportunities on a regular basis. Making a habit of this ensures that you always have an idea of what you're really worth and what you need to be doing to stay current.

I can tell you that I did option #2 before. I had an amicable relationship with my employer, but the work kinda sucked and he knew he couldn't afford to pay me what I was actually worth. He tried giving me extra perks etc. to keep me, but in the end, the bills weren't getting paid.

There was no malice when I finally left, and I made myself as available as I saw reasonable (no complaints from their end) for the replacement that they eventually found. They were kinda glad that it gave them more time to find someone as well.

But keep in mind: I was certain that I was leaving - it wasn't a power play.

I would love to downvote this but just wont. Nobody is indespensable. And don't think that just because you work hard and do a great job you will be rewarded. i have seen people who were awarded Best employee one year being removed the next year due to recession and others who were worse have been retained because they were cheap
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DPDApr 25 '11 at 9:48

1

The OP seems to have adequately demonstrated to his manager that he deserves more. Convincing the entire company, including HR, is not normally possible. I'm aware of cases where managers apologized for raises, but said they couldn't do any better for some reason or other.
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David ThornleyApr 25 '11 at 15:11

I can't think of any situation where option #2 would be a good idea - few employers would react nicely to your "I'm going to start looking for another job unless you pay me an extra 10k" demand. You will be marked as a "problem" employee though. There's no harm in calling a meeting and asking politely for a pay-review (especially if you have figures to back up your claim that you're being underpaid) but threatening your employer is likely to backfire.

The normal way of doing this is to get another offer and then hand in your notice. Recruiting and training employees is costly, so employers will often come back with a counter-offer at this point. Be aware that you really shouldn't do this either unless you're genuinely prepared to leave your job, otherwise your credibility will be shot if the counter-offer doesn't come and you withdraw your resignation anyway.

My advice would be to go for a variant of option #1 - look for another job and take it regardless of any counter-offer, unless you're prepared to go through this stressful and disruptive process the next time you feel undervalued.

In general, corporations want their employees to stay. They have already invested a lot in you, and given that they found you the promotion, they think you are doing good work. Even if their hands are tied and they can't give you a raise, there is no incentive for them to be spiteful and get rid of you. Even if they did, I mean, you were leaving anyway, and it makes a cool story about how honest you are later in life.

I would like to add some obvious caveats to your answer, just in case someone doesn't read or understand the initial question thoroughly. 1) Don't do this if you haven't been working at the job very long. 1 year would be the least amount of time I would consider tenure. 2) If your boss is new in their position, don't do this. 3) Be very honest with your abilities and value in the company. The question alludes to medium or senior level developer, at the very least.
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JordanApr 25 '11 at 6:49

Yes, this was presuming an employee like the OP who had recently been awarded a promotion but not a raise due to HR constraints.
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BradApr 25 '11 at 19:04

Be careful -- some employers like to keep an eye on the market & see what kind of talent is available, too. If your employer suddenly spots your resume in play, it could lead to an awkward meeting with your manager.
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TMNApr 25 '11 at 18:43

Well the thing is that normally no one directly go to the employer and directly tells him that he is looking for the job. that's not the normal practice. majority of employer as good as he seems will not like that (majority of the time there will be repercussions). It is another thing that he comes to know about that without you telling him and i think that this is good.